Introduction
The federal republic of Brazil, located in South America, is the largest country in the continent, both in landmass and population size. It ranks as the sixth most populous nation in the world. Being the only Portuguese-speaking country in the continent with a history of the century-long mass migration from other regions, Brazil is also one of the most culturally and ethnically diverse states globally. Its gross domestic product is the twelfth largest by nominal measures and eighth in purchasing power parity globally attributed to its highest production of coffee for centuries. Because of these factors and the political stability present in the country, Brazil is a suitable location for the expansion of Walmart operations.
Background of Walmart
Walmart is a leading retailer that ranks top in the Fortune 500 list of companies. Founded in 1962 by Sam Walton Rogers, Walmart is an American retail corporation that operates numerous hypermarkets, grocery, and discount department stores in 24 countries globally (Walmart, 2021). Rogers opened the first store in Arkansas with an emphasis on customer attention, control of cost, and efficiency in distribution networks. The corporation entered the global market in 1991 after opening a store in Mexico (Walmart, 2021). Subsequent growth continued via new stores or acquisitions of reputable retailers in China, Canada, the United Kingdom, and Germany. After the death of its founder in 1992, Walmart experienced a financial decline and quickly accumulated debt from investment in new strategies to expand its territory (Walmart, 2021). By 1995, the company was able to pay off its accrued liability and double its sales. Towards the end of the century, Walmart became the largest privately owned company, with sales surpassing those of Exxon Mobil, making it the largest organization with a global presence at the time (Walmart, 2021). The following years saw Walmart acquire various e-commerce businesses, such as jet.com in 2016 and Moosejaw in 2017, maintaining its reputation as a global leader in the retail business.
Importance of Cultural Differences in the Global Economy
Culture can be defined as the beliefs, material traits, and social forms shared and common to a particular collective group (Cole, 2019). Cultural differences have been identified as a significant obstruction to the success of the international business. This phenomenon makes it crucial for managers, employees, and company representatives who engage in international trade to familiarize themselves with foreign cultures to eliminate the barriers presented by a lack of cultural knowledge (Adamczyk, 2017). Cross-cultural contact, defined as an interaction of individuals from various cultures, traditions, and values, has developed into an important aspect of international business and globalization.
In this case, two indicators appear to have great significance in how foreign business is conducted, and they include international communication and proficiency. The first pointer is used to create better communication processes about different situations and people using varied codes. On the other hand, cross-cultural proficiency comprises two linked components: the ability to understand and work with members upholding different beliefs and the skill to thrive in an intense multicultural environment. To acquire skills necessary for international proficiency, existing communication processes must improve.
Significant Cultural Beliefs, Values, and Norms in Brazil
Brazil is keen on developing strong business relationships after suffering several years of economic depression. To successfully conduct business in this country, one needs to adhere to the local perception of commercial culture, values, and norms. In Brazil, companies tend to do business with individuals rather than huge corporations; hence, physical meetings are preferred to written communication, such as emails and memos. Communication during these meetings is usually informal, and participants normally do not follow strict protocols, as all members in attendance are encouraged to contribute to the discussion with little regard to the corporate hierarchy (Akira et al., 2019). When it comes to dressing code, the key is to understand the company one is dealing with because some prefer conservative apparel. In conservative companies, men are expected to wear suits while women tend to show up in formal business attire.
Appropriate titles should be used when addressing individuals; hence, it is crucial to research one’s seniority beforehand. Informal gatherings, men are addressed as Senhor, married women as Senhora, while single or young ladies are referred to as Senhorita. It is also advisable to exchange business cards while interacting (Akira et al., 2019). Having one side of the business card translated to Portuguese is considered best practice. Business appointments are usually made a couple of weeks before the date, and confirmation is done via writing. Arriving on time is important, especially in the Capital city of Brasilia and Sao Paulo. However, in other districts, such as Rio de Janeiro, being late by a few minutes is acceptable.
Comparing Brazil’s Corporate Culture Using Hofstede Dimensions
Hofstede’s cultural dimensions are a representation of independent preferences of one state of affairs to others that are used to distinguish countries. To compare Brazil’s competence, four dimensions were considered: individualism versus collectivism, power distance, uncertainty avoidance, and masculinity versus femininity (Hofstede Insights, 2021). In the first dimension, addressing the interdependence degree between members of society, Brazil scored 38 against the United States 91. This score reflects the strong and cohesive groups in which people are integrated right from birth. The style of communication in Brazil is considered context-rich, characterized by profuse speech and elaborate written instructions. Comparatively, the United States’ business communication tends to be informal, participative to a certain degree, and direct.
The dimension of power distance represents inequality brought about by individual uniqueness. With a score of 69 against America’s 40, Brazil depicts a society that respects seniority and accepts inequalities among people. Hofstede defined the third dimension as to how societies deal with future uncertainties (Hofstede Insights, 2021). At 76, Brazil’s society relies mainly on the rules and regulations to lead a structured life. Similar to societies displaying a high uncertainty avoidance, bureaucracy is used to make the surrounding a safer place to coexist. In the final dimension, a higher score represents masculinity while a lower mark is considered feminine. In this case, masculinity indicates that society is motivated by competition and success, while femininity means it cares for others and their quality of life. Brazil’s score of 49 places it in an intermediate state where both masculinity and femininity exist. Contrary to that, the United States score of 62 represents a society that is motivated by achievements.
Advantages and Challenges of Operating in Brazil
Operating an international business has both its advantages and challenges. Among the various benefits enjoyed by firms operating in Brazil is the availability of a large consumer market. With a population of over 200 million, a diversified consumer pool can create exciting commercial prospects for new clientele looking to expand into the territory (Akira et al., 2019). Brazil’s geographical location provides unique international access to the rest of Latin America. As a part of the Southern Common Market pact, businesses in Brazil are free to conduct international trade with neighboring countries without incurring additional costs due to the removal of non-tariff restrictions and customs duties.
Compared to its neighbors, Brazil boasts of having good infrastructural and carriage facilities, including different land and railway transportation systems. However, there are numerous challenges in operating in a developing country (Akira et al., 2019). For instance, Brazil is known for its bureaucracy concerning the processes required to operate a business legally. In total, companies are required to undergo eleven procedures and an average of 90 days of operation to gain a business permit (Akira et al., 2019). These steps are usually long, leading to discouragement from investors from venturing into the Brazilian market.
Strategies to Enhance Cultural Intelligence of United States’ Leaders
Cultural intelligence is the cognitive ability to understand and respond to the beliefs, values, and norms of groups belonging to a different ethnic background. Successful market penetration requires managers and leaders who possess a high cultural quotient. The two strategies recommended to enhance the cultural intelligence of leaders from the United States venturing into Brazil include developing self-awareness concerning other people and learning the Portuguese language. By being self-aware, one can be mindful of the fact that people from the same culture might possess different opinions. Moreover, leaders may compare their background with the new culture to identify similarities and differences essential in developing and maintaining professional relationships. Brazilians are proud of their language and are usually more receptive to foreigners who communicate in Portuguese; hence leaders are encouraged to learn the language.
Conclusion
Following an in-depth analysis of the cultural values, norms, and beliefs of operating in Brazil, Walmart, a Fortune 500 company, is contemplating venturing into this market. The retailer’s leaders must take into consideration the country’s cultural beliefs about their dress code, time management, and communication preference. Brazil’s geographic location, population, and policies are among the advantages of doing business in this country, while the main disadvantage includes long and tedious bureaucracy.
References
Adamczyk, M. (2017). The importance of cultural differences in international business. Central European Review of Economics and Management, 1(2), 151-170. Web.
Akira, M. M., Pilati, R., Lemos, M. T., Ferreira, C. M., & Fischer, R. (2019). Between simpatia and malandragem: Brazilian jeitinho as an individual difference variable. PLoS ONE 14(4), 1-11.
Cole, N. (2019). So what is Culture, Exactly?
Hofstede Insights. (2021). Country comparison.
Walmart. (2021). Our history.